Write down your birth date in the DDMM format. Let X denote the resulting number (it will be either a 3-, or 4-digit number).

Suppose that the market demand function for a product is given by q = X p. There are two firms in this market: Firm 1 and Firm 2. Entry is impossible. Products are undifferentiated. Production is a one-time game i.e. it is not repeated. The total cost of production for Firm i is c(qi) = 10qi. (i.e. the marginal cost is $10, and we ignore the fixed costs.)

question: 2. Suppose that Firm 1 sets its quantity first, and Firm 2 follows. Calculate the quantity each firm produces in the Stackelberg equilibrium, and determine the market price.